The Lion Electric Company Common Shares

Good morning, ladies and gentlemen. Welcome to Lion Electric fourth quarter and 2021 results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the form of presentation. As a reminder, this conference call is being recorded. I would now like to turn the call over to Isabelle Aja, Vice President, Investor Relations and Sustainable Development. Please go ahead, Ms. Aja.

Good morning, everyone. Welcome to LION's fourth quarter and 2021 results conference call. Bienvenue à la conférence téléphonique sur les résultats financiers du quatrième trimestre et de l'année 2021 de Lyon. Today, I'm here with Marc Bédard, our CEO, funder, and Nicolas Brunet, our Executive Vice President and CFO. Please note that our discussion will include estimates and other forward-looking information, which our actual results could differ from in the future. We invite you to review the cautionary language in yesterday's earnings release and in our MD&A regarding the various factors, assumptions, and risks that could cause our actual results to differ. With that, let me turn it over to Marc to begin. Marc?

Thank you, Isabelle, and good morning, everyone. Thanks for being with us today to discuss our performance during our first year as a public company, a performance we are very proud of. Indeed, 2021 was the best year ever for Lion. We consolidated our commanding leadership position in the electric bus market, where we have been selling and delivering vehicles since 2016, while at the same time starting to sell our electric trucks. Despite the supply chain crisis and the COVID challenges, we also proved to be a very resilient company and started the construction of both the Joliet Manufacturing Plant and the Lion Campus, and we continued to hire talented employees, including key senior leaders. All this while growing our order book by over 2,000 units, delivering about 200 vehicles, and developing new platforms. I would like to discuss those three elements on today's call before passing it on to Nicholas, who will discuss our financial results. First, we delivered on our 2021 strategic objectives. Second, we continued to proactively manage supply chain challenges, and we increased the pace of vehicle deliveries in Q4 of 2021. And finally, we are entering 2022 with optimism our main objective being the scale-up of our manufacturing and commercial operations. Let me start with our 2021 main achievements. We are pleased that in 2021, we surpassed pre-pandemic levels and delivered 196 vehicles, more than double the 80 buses delivered in 2020. With respect to the order book, We drastically increased it to $575 million, consisting of 2,025 buses and 300 trucks, for a total of 2,325 vehicles. This compares to an order book of 300 vehicles when we announced our planned public listing in November 2020. It also includes an order from a customer with a leader in the retail industry for 50 Lion-A tractor trucks. We are seeing a similar trend in the Lion Energy PO book, which consists of 278 charging stations and related services, representing a total order value of $3 million. Lion Energy is a key element as we support our clients in their transition journey to EVs. With the same objective of supporting our customers, we announced earlier this week a partnership agreement with Cox Automotive that will complement our experience centers by giving our customers access to an additional 25 service centers, more than 1,000 technicians, and nearly 800 mobile service trucks in the field. We also made significant progress on our two construction projects and delivered on key milestones for each of our manufacturing facilities. First, with respect to our state-of-the-art vehicle factory in Joliet, Illinois, we finished the construction of the Shell Building and took possession of our 900,000 square foot manufacturing plant. With tenant improvement work and the purchase of critical manufacturing equipment progressing as scheduled, we are still on track to start vehicle production in the second half of this year. This will be the largest U.S. production site for zero-emission, medium- and heavy-duty vehicles with a capacity of 20,000 vehicles per year. Hiring is ongoing, and we have started to fill key positions, such as Eric Pansagra, who recently joined Lion as general manager for the Joliet facility. Now turning to the Lion campus. During the year, we broke ground in the construction of what will house our new battery plant and innovation center. Construction work is on schedule. We have now completed the building foundations for the battery plant and started to mount the structure of the building. On the technical front, We are working with JRA, an Hitachi company, to purchase and set up production equipment. Here again, we are on schedule and still planning to start producing the first batteries in the second half of this year. With respect to the Lion team, the build-out is also going according to plans. Our headcount has increased by 550 employees since November 2020. It now amounts to over 1,000 people including more than 300 engineering and research and development professionals. Recent key hires also include Richard Coulomb as Senior Vice President, Strategic Initiatives, David Seacott as Vice President, Operations, and William Blanchard as Head of Lion Capital Solutions, on which Nicholas will further elaborate in a moment. On the product development side, We spent $46 million in R&D in 2021 as we continued to develop new platforms that will complement our current seven models. During the year, we were proud to unveil the first purpose-built all-electric ambulance that we developed in partnership with Demers, one of the largest ambulance manufacturers in North America. Let me now provide a brief update on supply chain. 2021 supply chain challenges prove the importance of having a robust supply chain tailored to electric vehicles, which is precisely what we have here at Lion. Unlike newcomers or even incumbent OEMs entering the field of EV, our 10 plus years of experience in the EV space have been key in managing this global supply chain crisis. It took us over five years to build a deep supply chain tailored to EVs, and this has been a differentiating factor for us in 2021 and will remain a key competitive advantage for our long-term growth. During Q4, we were pleased to see an improvement in the pace of production as compared to Q3. Not only do we have more visibility on potential upcoming issues, but we are also starting to feel the tangible impact of proactive initiatives we previously undertook to address these supply chain challenges. But we remain cautiously optimistic for this year, as we continue to see disruptions in the global supply chain in addition to labor shortages, driven in part by COVID, that affect both our operations and our suppliers' operations. In a nutshell, supply chain challenges are eased but not fully resolved yet. I will now provide more color on our 2022 key priorities. First, on the deliveries and purchase order front, we remain focused on increasing our purchase order book with the objective to establish our leadership position in the electric truck market as we have already done in the electric school bus market. The strong secular tailwinds driving EV adoption should further support this objective, as we anticipate that government programs funded by the bipartisan infrastructure bill in the United States, in addition to many other programs, will formally materialize in 2022. As a reminder, The infrastructure bill includes a $5 billion funding package towards the replacement of existing school buses for zero-emission ones and $7.5 billion for EV infrastructure. With respect to the ZETF program in Canada, it includes $2.75 billion to support school bus and public transit electrification. Although we cannot confirm the exact timing of funding approval, We are pleased to announce that Student Transportation of Canada, which has placed a conditional order for 1,000 all-electric Lion's Sea School buses under the ZTF, has formally been accepted by the government for the last step of its funding application. Now turning to our two new manufacturing facilities. In Joliet, We will start receiving manufacturing equipment to start production of buses over Q1 and Q2 of this year, and equipment for trucks will be received later during the year. As of December 31st, in addition to tenant improvements, we have spent $13 million in CapEx, and as of today have engaged an additional $40 million on building and equipment such as AGVs, lifts, overhead cranes, and toolings. We will first focus on the installation of a production line for buses to keep up with the very strong momentum for our electric school buses, as reflected in our order book. Simultaneously, we will ramp up our manufacturing capacity by setting up additional production lines, including the one for truck. Our headcount in Illinois should amount to approximately 500 employees at the end of this year. Now, with respect to the Lyon campus, The battery module assembly line, which will be highly automated, has already been ordered for initial testing, production of module prototypes, and commercial production. The orders for the equipment requiring long lead time, such as conveyors and wire bonders, have also been placed, and both delivery and installation are on schedule. As of December 31st, we have spent $5 million in capex, and as of today, we have engaged an additional $55 million on equipment and building. Furthermore, we are currently in active negotiations with cell suppliers to finalize long-term supply agreements. And finally, the start of module and pack production is planned for the second half of this year. As you can see, all is going according to plans. As far as our Innovation Center, which will mostly house our R&D activities. It will be completed and operational in 2023. Which takes me to the last element on which we will focus in 2022, the initial delivery and commercialization of additional models. We are pleased to announce that during the year, we will start delivering the first Lion-8 tractor and Lion-8 refuse trucks for which we already have orders. We also expect to begin this year the commercialization and delivery of the Lion D bus, the Lion 5, the Lion 8 bucket truck, and our electric ambulance. However, we have decided to push to 2023 the commercialization of the Lion 7, the Lion boom truck, and the Lion utility truck, As on the front of supply chain challenges, we want to allocate all efforts on models for which we already have a strong demand or for which we are in active commercialization. With that, let me now turn the call over to Nicholas, who will comment on our financial results.